Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "APA" means that certain Asset Purchase Agreement, dated as of November 28, 2022, by and among Service Recipient, Service Provider, and Frederick G. Voss and Elena M. Voss (solely for purposes of certain provisions therein), as may be amended, restated, supplemented, or otherwise modified from time to t

Section 1.2 — Rules of Construction (a) Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the APA. In the event of a conflict between the definitions set forth in this Agreement and those in the APA, the definitions in this Agreement shall control for purposes of this Agreement. (b) The headings and captions contained in this Agreement are inserted for convenie

Section 2.1 — Obligation to Provide Services Service Provider shall provide, or cause to be provided, to Service Recipient the Services described in this Article II and set forth in detail on Schedule A during the Service Period, in accordance with the terms and conditions of this Agreement. The Services shall commence on the Closing Date and shall continue through the end of the Service Period, unless earlier termin

Section 2.2 — Description of Services The Services to be provided by Service Provider shall consist of the following categories of transition support, as more fully described in Schedule A: (a) Transition Manufacturing Support. Service Provider shall provide manufacturing support services to facilitate the transition of ProShield Product Line production operations to Service Recipient or its designees. Such manufactu

Section 2.3 — Standard of Services Service Provider shall perform the Services with substantially the same degree of care, skill, and diligence as Service Provider has historically employed in connection with the ProShield Product Line in its own operations during the twelve (12) month period immediately preceding the Closing Date. The Services shall be performed by qualified Service Provider Personnel who possess ap

Section 2.4 — Service Provider Personnel (a) Service Provider shall designate Elena M. Voss, Vice President of Operations, as the primary point of contact for the coordination, management, and delivery of the Services under this Agreement (the "Service Provider Transition Manager"). The Service Provider Transition Manager shall have the authority to make day-to-day decisions regarding the scheduling, allocation, and

Section 2.5 — Access and Cooperation (a) Each Party shall provide the other Party with reasonable access to its facilities, personnel, books, records, and systems as may be reasonably necessary for the performance and receipt of the Services. Such access shall be provided during normal business hours and upon reasonable advance notice, unless otherwise agreed by the Parties or required by the nature of the Services.

Section 2.6 — Additional Services (a) From time to time during the Service Period, Service Recipient may request in writing that Service Provider provide additional transition services beyond those described on Schedule A (each, a "Request for Additional Services"). Each such request shall describe in reasonable detail the nature, scope, and expected duration of the additional services being requested. (b) Service Pr

Section 2.7 — Excluded Services Nothing in this Agreement shall require Service Provider to provide any services or perform any obligation that would: (i) violate any applicable law, statute, regulation, rule, ordinance, or order of any Governmental Authority; (ii) conflict with Service Provider's obligations to any third party under any contract, agreement, or arrangement existing as of the Closing Date or entered i

ARTICLE III — COMPENSATION AND PAYMENT

Section 3.1 — Monthly Service Fee (a) In consideration for the provision of the Services during the Service Period, Service Recipient shall pay to Service Provider a monthly fee of Thirty-Five Thousand Dollars ($35,000) per calendar month (the "Monthly Service Fee"). The Monthly Service Fee shall be payable in arrears in accordance with the invoicing and payment procedures set forth in Section 3.3. (b) If the Service

Section 3.2 — Reimbursable Expenses (a) In addition to the Monthly Service Fee, Service Recipient shall reimburse Service Provider for all reasonable, documented out-of-pocket expenses actually incurred by Service Provider in direct connection with the performance of the Services (the "Reimbursable Expenses"). Reimbursable Expenses shall include, without limitation, reasonable travel expenses (including airfare, lodg

Section 3.3 — Invoicing and Payment (a) Service Provider shall deliver to Service Recipient monthly invoices within fifteen (15) days after the end of each calendar month during the Service Period, setting forth in reasonable detail: (i) the Services performed during such calendar month; (ii) the Monthly Service Fee (or prorated portion thereof) applicable to such month; and (iii) all Reimbursable Expenses incurred d

Section 3.4 — Disputed Amounts (a) If Service Recipient in good faith disputes any amount set forth in an invoice, Service Recipient may withhold payment of such disputed amount, provided that Service Recipient delivers to Service Provider written notice specifying the basis for the dispute in reasonable detail within twenty (20) days of receipt of the applicable invoice. The withholding of disputed amounts shall not

Section 3.5 — Taxes (a) All fees and expenses payable under this Agreement are exclusive of any applicable sales, use, value-added, goods and services, or similar taxes (collectively, "Transaction Taxes"). All Transaction Taxes imposed on or with respect to the Services provided under this Agreement shall be borne by Service Recipient. Service Provider shall separately state any applicable Transaction Taxes on each i

ARTICLE IV — INTELLECTUAL PROPERTY AND CONFIDENTIALITY

Section 4.1 — Ownership of intellectual Property (a) The Parties acknowledge and agree that all intellectual property rights in and to the ProShield Product Line, including, without limitation, the "ProShield" trademark (United States Patent and Trademark Office Registration No. 2,876,411), all forty-seven (47) proprietary coating formulations, all related trade secrets, customer-specific formulation libraries, manuf

Section 4.2 — Confidentiality (a) Each Party (in such capacity, the "Receiving Party") shall maintain the confidentiality of all Confidential Information of the other Party (in such capacity, the "Disclosing Party") received in connection with the performance or receipt of Services under this Agreement. The Receiving Party shall protect the Disclosing Party's Confidential Information using the same degree of care tha

Section 4.3 — Return of Materials Upon the expiration or termination of this Agreement for any reason, Service Provider shall promptly, and in any event within fifteen (15) days, return to Service Recipient, or destroy (at Service Recipient's election, as communicated in writing), all materials, documents, data, files, records, samples, equipment, and other tangible or intangible property of Service Recipient that ar

ARTICLE V — REPRESENTATIONS AND WARRANTIES

Section 5.1 — Mutual Representations Each Party hereby represents and warrants to the other Party, as of the Execution Date and as of the Closing Date, as follows: (a) Organization and Good Standing. Such Party is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization (the State of Delaware, in the case of Crestline Packaging Solutions LLC; the State of New York, in

Section 5.2 — Service Provider Representations In addition to the representations and warranties set forth in Section 5.1, Service Provider hereby represents and warrants to Service Recipient as follows: (a) Sufficiency of Personnel and Resources. Service Provider has, and throughout the Service Period will maintain, sufficient qualified personnel and resources to perform the Services as described in this Agreement a

ARTICLE VI — TERM AND TERMINATION

Section 6.1 — Term This Agreement shall become effective on the Closing Date and shall remain in full force and effect until the expiration of the Service Period (i.e., six (6) months after the Closing Date), unless earlier terminated in accordance with this Article VI (the "Term"). Based on the actual Closing Date of January 20, 2023, the Service Period expires on July 20, 2023. If the Closing does not occur under t

Section 6.2 — Early Termination by Service Recipient (a) Service Recipient may terminate this Agreement in its entirety at any time upon not less than thirty (30) days' prior written notice to Service Provider. (b) Service Recipient may terminate this Agreement with respect to any individual Service category (i.e., Transition Manufacturing Support, Formulation Technical Assistance, or Customer Introduction Services)

Section 6.3 — Termination for Cause Either Party may terminate this Agreement immediately upon written notice to the other Party if: (a) The other Party commits a material breach of any representation, warranty, covenant, or obligation under this Agreement, and such breach remains uncured for a period of thirty (30) days after written notice from the non-breaching Party specifying the nature of the breach in reasonab

Section 6.4 — Termination by Service Provider Service Provider may not terminate this Agreement or any individual Service category for convenience prior to the expiration of the Service Period. Service Provider's right to terminate this Agreement is limited solely to the circumstances described in Section 6.3. The Parties acknowledge that Service Recipient's ability to rely upon the continued availability of the Serv

Section 6.5 — Effect of Termination (a) Upon the expiration or termination of this Agreement (whether in whole or in part), Service Provider shall have no further obligation to provide the Services (or the terminated portion thereof), except that Service Provider shall complete, in a commercially reasonable manner, any services that are in progress and that require a reasonable wind-down period, which wind-down perio

Section 7.1 — Service Provider Indemnification Service Provider shall indemnify, defend, and hold harmless Service Recipient and its affiliates, and each of their respective officers, directors, managers, members, employees, agents, successors, and permitted assigns (collectively, the "Service Recipient Indemnitees") from and against any and all losses, claims, damages, liabilities, costs, and expenses (including rea

Section 7.2 — Service Recipient Indemnification Service Recipient shall indemnify, defend, and hold harmless Service Provider and its affiliates, and each of their respective officers, directors, shareholders, employees, agents, successors, and permitted assigns (collectively, the "Service Provider Indemnitees") from and against any and all Losses arising out of or relating to: (a) any gross negligence or willful mis

Section 7.3 — Indemnification Procedures (a) Notice. The Party seeking indemnification (the "Indemnified Party") shall provide prompt written notice to the Party from which indemnification is sought (the "Indemnifying Party") of any claim, demand, suit, or proceeding for which indemnification is or may be sought under this Article VII (a "Claim"). Such notice shall describe the Claim in reasonable detail, including t

Section 7.4 — Relationship to APA Indemnification The indemnification obligations set forth in this Agreement are independent of and in addition to any indemnification obligations set forth in the APA. For the avoidance of doubt, the APA provides for an indemnification cap of Four Million Five Hundred Thousand Dollars ($4,500,000) and a basket of One Hundred Eighty Thousand Dollars ($180,000) with respect to indemnif

ARTICLE VIII — LIMITATION OF LIABILITY

Section 8.1 — Cap on Liability Except in the case of Losses arising from (i) gross negligence, (ii) willful misconduct, (iii) fraud, or (iv) a breach of Article IV (Intellectual Property and Confidentiality), neither Party's total aggregate liability to the other Party under or in connection with this Agreement, whether in contract, tort (including negligence), strict liability, or otherwise, shall exceed the total a

Section 8.2 — Exclusion of Consequential Damages IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PERFORMANCE OR NON-PERFORMANCE OF THE SERVICES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, LOSS OF REVENUE, LOSS OF DATA, LOSS OF GOODWILL, BUSINESS INTERRUPTIO

Section 8.3 — No Warranty of Outcomes Service Provider does not guarantee, and makes no representation or warranty with respect to, any particular outcome, result, or level of performance arising from the provision of the Services, including, without limitation, with respect to customer retention rates, production volumes, product quality, operational continuity, or the successful completion of the transition of the

ARTICLE IX — RELATIONSHIP OF PARTIES

Section 9.1 — Independent Contractor The relationship between Service Provider and Service Recipient under this Agreement is that of independent contractors. Nothing contained in this Agreement shall be construed to create or imply a partnership, joint venture, agency, fiduciary, franchise, or employment relationship between the Parties. Service Provider shall have sole control over the manner and means by which the

Section 9.2 — No Authority to Bind Neither Party shall have any authority to bind, commit, obligate, or make any representation or warranty on behalf of the other Party, or to incur any liability or obligation on behalf of the other Party, and neither Party shall hold itself out to any third party as having any such authority. Any action taken by a Party in violation of this Section 9.2 shall be void and of no force

ARTICLE X — GENERAL PROVISIONS

Section 10.1 — Governing Law This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

Section 10.2 — Dispute Resolution Any dispute, controversy, or claim arising out of or relating to this Agreement, including the breach, termination, or validity thereof, shall be resolved in accordance with the dispute resolution provisions set forth in the APA, including, without limitation, submission to the exclusive jurisdiction and venue of the state courts of the State of New York located in New York County, N

Section 10.3 — Notices All notices, requests, demands, consents, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand or by personal delivery, (b) sent by a nationally recognized overnight courier service (with tracking capability), or (c) sent by certified mail, return receipt requested, postage prep

Section 10.4 — Assignment Neither Party may assign, transfer, or delegate this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other Party, which consent may be withheld in such other Party's sole discretion; provided, however, that Service Recipient may, without the consent of Service Provider, assign this Agreement (in whole or in part) to (a) any affilia

Section 10.5 — Force Majeure Neither Party shall be liable to the other Party for any delay in or failure to perform its obligations under this Agreement (other than payment obligations) to the extent such delay or failure results from causes beyond such Party's reasonable control, including, without limitation, acts of God, fire, flood, earthquake, hurricane, tornado, or other natural disaster; epidemic, pandemic, o

Section 10.6 — Entire Agreement This Agreement, together with the APA and the other Ancillary Agreements (as defined in the APA), and all exhibits and schedules attached hereto and thereto, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior negotiations, discussions, representations, understandings, and agreements, whether written or oral, between the Pa

Section 10.7 — Amendment and Waiver (a) This Agreement may not be amended, modified, supplemented, or restated except by a written instrument duly executed by both Parties. (b) No waiver by either Party of any provision of this Agreement or of any breach or default hereunder shall be effective unless in writing and signed by the waiving Party. No waiver of any provision or breach shall constitute a continuing waiver

Section 10.8 — Severability If any provision of this Agreement is held by a court of competent jurisdiction or arbitral tribunal to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. Th

Section 10.9 — Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic mail (including in .pdf, .tif, or similar format) or by facsimile transmission shall be as effective as delivery of a manually ex

Section 10.10 — No Third-Party Beneficiaries This Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.

Section 10.11 — Interpretation The Parties acknowledge that each Party has participated in the drafting of this Agreement and that, accordingly, no presumption or rule of construction shall apply against either Party as the drafter of this Agreement. The rules of construction set forth in the APA shall apply to the interpretation of this Agreement to the extent relevant and not inconsistent with the terms hereof. IN

1. Production Process Documentation and Knowledge Transfer. Service Provider shall prepare and deliver to Service Recipient comprehensive documentation of the manufacturing processes used in the production of all ProShield Product Line products, including standard operating procedures, batch records, process flow diagrams, equipment operating manuals, and maintenance schedules. Service Provider shall conduct knowledg

2. Equipment Operation Training. Service Provider shall provide hands-on training to Service Recipient's production and maintenance personnel on the operation, calibration, preventive maintenance, and troubleshooting of the following Acquired Assets: (a) Three (3) high-speed dispersion mills; (b) Two (2) automated filling lines; (c) Fourteen (14) stainless steel mixing tanks, each with a capacity of five thousand (5,

3. Quality Assurance and Quality Control Protocol Transfer. Service Provider shall transfer to Service Recipient all quality assurance and quality control protocols, testing methodologies, acceptance criteria, specification sheets, certificates of analysis templates, and related documentation used in connection with the ProShield Product Line. Service Provider shall assist Service Recipient in establishing and implem

4. Raw Material Supplier Introductions and Sourcing Guidance. Service Provider shall introduce Service Recipient to the raw material suppliers and vendors historically used in connection with the ProShield Product Line. Service Provider shall provide guidance regarding sourcing strategies, approved supplier lists, qualification criteria, lead times, pricing history, and alternative sourcing options.

5. Production Scheduling Assistance. Service Provider shall assist Service Recipient with production scheduling during the transition, including guidance on optimal batch sequencing, equipment utilization, changeover procedures, and capacity planning.

6. Inventory Management and Transfer Coordination. Service Provider shall coordinate with Service Recipient to facilitate the orderly transfer of all inventory included among the Acquired Assets, estimated at approximately Two Million One Hundred Thousand Dollars ($2,100,000) in value. Such coordination shall include physical inventory counts, reconciliation, labeling, storage guidance, and shelf-life management.